Over the last few weeks, I have found myself screening for
stocks with the best Relative Price Changes in an effort to
determine whether a stock is good or not.
Of course earnings growth and valuations are important. But if a
stock is simply not responding or going down (worse than the
market), something's wrong. Or at the very least, it's just simply
not ready to move higher.
I've talked about this kind of stuff in the past what
investors consider to be their best stocks -- and the answer is:
the ones performing the best, in other words, moving higher.
And it's the same here.
Stocks moving higher have a tendency of moving even higher.
And the stocks I've been looking at recently are indeed the ones
moving higher. Especially on good volume, since the overall market
volume has been kind of weak.
And if they are moving higher, it's likely because there's a
good reason for them to be moving higher or else they probably
Of course, this doesn't mean you should only look at its price
But by including those kinds of things in your screening, some
very interesting stocks will come up.
Maybe some that might've just missed your normal fundamental
screening. But when you put on your radar screen thru other
measures (its price performance for example), you might find that
these are just the kinds of companies you've been looking for.
Once again, you'll also notice I said relative price strength.
Of course, there are periods where virtually everything is going
down. So screening for absolute positive price changes will often
times come up with zero results in these periods, just when you
need them the most.
But also, when the market is doing nothing but going up, you
want to get into the pacesetters and outperformers, not the
laggards that are going up only because the rising tide is raising
all the ships.
So using the relative price strength will always put the
outperformers on your list in both good times and bad.
In this week's screen, I'm looking for relative price change
winners that also have the fundamentals to potentially make these
gains lasting and continue.
The screen starts off with:
Relative % Price change 12 weeks greater than 0
- Relative % Price change 4 weeks greater than 0
- Relative % Price change 1 week greater than 0
(I'm looking for stocks that are outperforming the S&P 500
over the last 12 weeks, 4 weeks and 1 week.)
Projected Growth Rate (F1/F0) greater than the S&P
500's Median Growth Rate
(Not only do I want the price to be responding better than the
market. I also want the growth rate to be better than the market
Zacks Rank equal to 1
(Only Zacks Strong Buys)
Current Price greater than or equal to 5
(They all have to be trading at a minimum of $5 or higher.)
Average 20-Day Volume greater than or equal to 100,000
(And have enough volume to allow easy trading in and out.)
Here are 5 stocks that made it thru this week's screen:
Crestwood Midstream Partners LP
Evercore Partners Inc.
Mohawk Industries, Inc.
XL Group plc
All strong stocks fundamentally and they are on the move and
outperforming the market.
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Disclosure: Officers, directors and/or employees of Zacks
Investment Research may own or have sold short securities and/or
hold long and/or short positions in options that are mentioned in
this material. An affiliated investment advisory firm may own or
have sold short securities and/or hold long and/or short
positions in options that are mentioned in this material.
Disclosure: Performance information for Zacks portfolios and
strategies are available at:
CRESTWOOD MIDST (CMLP): Free Stock Analysis
DIODES INC (DIOD): Free Stock Analysis Report
EVERCORE PARTNR (EVR): Free Stock Analysis
MOHAWK INDS INC (MHK): Free Stock Analysis
XL GROUP PLC (XL): Free Stock Analysis Report
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